Misleading YouTube Videos Fuel Pump-&-Dump Scheme: SEBI Penalises Promoters, Operators & Finfluencers

Misleading YouTube Videos Fuel Pump-and-Dump Scheme in Sadhna Broadcast: SEBI Penalises Promoters, Operators, and ‘Finfluencers’

Mumbai – The Securities and Exchange Board of India (SEBI) has issued a final order penalising over 60 entities, including the promoters of Sadhna Broadcast Ltd., market operators, and a prominent ‘finfluencer’, for executing a classic “pump-and-dump” scheme that manipulated the company’s stock price and duped thousands of retail investors. The market regulator has imposed cumulative monetary penalties exceeding Rs. 19 crore, ordered the disgorgement of illicit gains, and debarred key individuals from the securities market for several years.

The detailed order, issued by SEBI’s Whole Time Member Ashwani Bhatia, outlines a carefully orchestrated two-phase scheme designed to artificially inflate the price of Sadhna Broadcast’s shares before offloading them onto unsuspecting investors. The company has since changed its name to Crystal Business System Limited, a move SEBI noted was indicative of an attempt by the promoters “to cover their tracks.”

Anatomy of the Manipulation

According to the SEBI investigation, the scheme began with the company’s promoters, including Gaurav Gupta and Rakesh Kumar Gupta, engaging market operators like Manish Mishra and Subhash Agarwal.

In the first phase, described as the “pump,” the promoters and a web of connected entities executed structured trades among themselves. These collusive transactions, though often small in volume, created a false sense of market interest and had a disproportionate impact on the share price due to low liquidity. This concerted effort systematically pushed the scrip’s price upward, which eventually peaked at over Rs. 33.

Once the price was sufficiently inflated, the second phase of the scheme, the “dump,” was initiated. This phase involved a sophisticated promotional campaign led by Manish Mishra, who operated several YouTube channels, including ‘Moneywise’, ‘The Advisor’, and ‘Profit Yatra’. Misleading and promotional videos were disseminated across these platforms, presenting Sadhna Broadcast as a fundamentally strong company and a promising investment opportunity.

SEBI noted that this aggressive promotional activity was timed to coincide with the artificial price rise, creating a powerful lure for retail investors. Drawn in by the social media hype and the perception of high trading volumes, retail investors entered the market in droves. This provided the “exit liquidity” that the scheme’s perpetrators needed.

The promoters, who held a 40.95% stake in the company as of March 2022, sold off a significant portion of their shares, reducing their holding to 25.58% by December 2022. During this period, the number of public shareholders exploded from a mere 885 to 72,509. Once the promoters and operators had sold their holdings at inflated prices, they exited the market, causing the share price to crash. The stock now trades at approximately Rs. 2.60, leaving retail investors with substantial losses.

SEBI’s Penalties and Broader Concerns

In its order, SEBI took stringent action against the violators under the provisions of the SEBI Act, 1992, and its Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations, 2003.

Key penalties include:

• Monetary Fines: Manish Mishra, the operator of the YouTube channels, faced the highest penalty of Rs. 5 crore. Key promoters Gaurav Gupta and Rakesh Kumar Gupta, along with operators Subhash Agarwal, Peeyush Agrawal, and Lokesh Shah, were each fined Rs. 2 crore. Dozens of other entities were also penalised, with fines ranging from Rs. 5 lakh to Rs. 1 crore. The noticees also included actor Arshad Warsi and his wife Maria Goretti Warsi, who were fined Rs. 5 lakh each.
• Debarment: Seven key individuals, including the main promoters and operators, have been banned from accessing the securities market for five years. A larger group of 51 other entities received a one-year ban.
• Disgorgement: All culpable noticees have been ordered to disgorge the unlawful profits made from the scheme, along with a simple interest of 12% per annum. This amount is to be remitted to SEBI’s Investor Protection and Education Fund (IPEF).

Beyond the specific violations, the SEBI order painted a “disturbing picture” of the misuse of social media platforms for market manipulation. The regulator observed that while such platforms benefit from massive advertising revenues, they “appear not to have taken proactive steps in curbing such deceptive content.” SEBI stressed the imperative for these companies to take greater responsibility, warning that their algorithms must not amplify manipulative content that results in retail investors losing huge sums of money.

The order serves as a stern message that such fraudulent practices will be met with severe consequences and acts as a cautionary tale for investors who rely on unverified financial advice from “finfluencers” on social media.

RELEVANT EXTRACT OF TEH ORDER OF SECURITIES AND EXCHANGE BOARD OF INDIA

SECURITIES AND EXCHANGE BOARD OF INDIA
FINAL ORDER
Under Sections 11(1), 11(4) and 11B of the Securities and Exchange Board of India Act, 1992

In respect of: Noticee  Gaurav Gupta AND 63  OTHERS

(The aforesaid entities are hereinafter individually referred to by their respective names/noticee numbers and collectively as “the Noticees”.)

In the matter of Sadhna Broadcast Ltd

Conclusion

268. The facts on record demonstrate that the promoters of SBL engaged the services of Manish Mishra through Subhash Agarwal. Simultaneously, the promoters also reached out to persons such as Peeyush Agarwal and Lokesh Shah, who were in control of entities holding significant shares in SBL. What followed was a carefully structured scheme executed in two coordinated phases.

269. In the first phase, connected and promoter-linked entities executed structured trades among themselves to steadily inflate the price of the scrip and create a false appearance of market interest. These trades—though often small in volume—had a disproportionate impact on price due to low liquidity, allowing the perpetrators to push the scrip upward with relatively minimal trading outlay.

270. Once the price had been sufficiently elevated, the second phase of the scheme was activated. Misleading and promotional videos were disseminated across YouTube channels such as Moneywise, The Advisor, and Profit Yatra, all operated by Manish Mishra. These videos presented SBL as a promising investment opportunity and were timed to coincide with and amplify artificial market activity. The retail investor segment, drawn in by this coordinated push and the misleading perception of active demand, provided the exit liquidity the promoters needed.

271. Serendipitously, an editorial which appeared earlier this week in a major financial daily stated that “Far too many retail investors are in thrall of disingenuous finfluencers, many of snake-oil salesmen proportions. This, despite a series of steps taken by SEBI to curb unauthorized – and fraudulent – investment advice.” This is the reality investors grapple with on a daily basis. In this case the promoters of Sadhana Broadcast Limited (name now changed to Crystal Business System Limited, with effect from May 23, 2025) entered into a scheme with market operators to sell their own shares through a pump and dump scheme. The promoters who held 40.95% of the shareholding of the company as of March 2022 sold over 15% of their holding through the scheme as a result of which their shareholding came down to 25.58% as of December 2022. During the same period, the number of public shareholders increased from a mere 885 to 72,509. The public shareholding, resultantly, went up from 59.05% as of March 2022 to 74.52% as on March 2023.

272. The moot point from what we have seen is the manner in which the promoters brought down their shareholding at the cost of innocent retail shareholders thereby making huge profits for themselves. A question that needs to be asked of the promoters is why would any promoter, in their right mind sell their holding if theirs was a well-managed and profitable company. The use of multiple YouTube channels to influence and mislead innocent investors in this case was well thought out by the perpetrators of the scheme / arrangement in connivance with the promoters. Such posts on social media would have led to emotional and spontaneous investment decisions. Not surprisingly, the number of retail investors jumped as a consequence thereof. In a way, the investors got caught in the crossfire and they only absorbed the liquidity on account of distribution of shareholding by the promoters.

273. The events narrated in this Order also paint a disturbing picture regarding the increasing use of social media platforms, which have immense reach and influence in the digital age, as tools for market manipulation. Paid advertising campaigns are undertaken through such platforms to reach a wide audience. These platforms—while benefiting from massive advertising revenues—appear not to have taken proactive steps in curbing such deceptive content. Given the magnitude of public money at stake and the growing trend of retail investors relying on social media for investment advice, it is imperative that these companies take greater responsibility for the material they host and promote. Their algorithms and monetization models must not end up amplifying manipulation resulting in retail investors losing huge sums of money.

274. The overall conduct of the Noticees has revealed a classic pump-and-dump scheme. The price was systematically pushed upward through collusive trading, followed by aggressive promotional activity to draw in retail investors, and finally, a coordinated sell-off by the promoters. The retail investors, misled by this staged market activity, were left holding the shares at distorted valuations once the manipulators that included the promoters had exited. The shares of SBL (now Crystal Business System Limited) trade at around Rs. 2.60 per share against a peak of above Rs. 33 at the height of the pump phase. The fact that the Company without changing its objects clause or stated business has changed its name is indicative of attempts made by the promoters to cover their tracks.

275. Such conduct strikes at the very heart of market integrity. It not only violates the provisions of the PFUTP Regulations, 2003, but also undermines investor trust in the fairness and transparency of the securities market.

276. This Order serves as a message that such manipulative practices by interested parties will be met with appropriate action. Investors are urged to exercise due diligence and caution, especially while investing in companies which see sudden spikes in prices without any attributable change in fundamentals.

277. In view of the pending CIRP proceedings against Varun Media Pvt. Ltd. (Noticee 8) and prevailing moratorium under Section 14 of the IBC, monetary penalty is not being imposed on Noticee 8 at this stage and the proceedings against the Company will be decided/ disposed of through a separate order by SEBI. However, direction for disgorgement shall be applicable against the said Noticee.

ORDER

278. In view of the aforesaid findings and having regard to the facts and circumstances of the matter, I, in exercise of the powers conferred upon me under Section 19 read with Sections 11(1), 11(4), 11 (4A) and 11B read with Section 15I of the SEBI Act and Rule 5 of the Adjudication Rules, 1995, hereby direct as under:

a. Noticees 1, 2, 21, 25, 26, 39 and 52 are restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, whatsoever, for a period of five (5) years from the date of this Order.

b. Noticees 3, 4-7, 9-13, 15-20, 22-24, 27-38, 40-47, 49-51, 53-58 and 60-63 are restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, whatsoever, for a period of one (1) year from the date of this Order.

c. Noticees shall disgorge the amounts mentioned against their respective names in the Table under Para 255 above, along with simple interest at the rate of 12% per annum, calculated from the end of the Investigation Period till the date of actual payment.

d. The amount mentioned in paragraph 278(c) shall be remitted by the aforementioned Noticees to the Investor Protection and Education Fund (IPEF) referred to in Section 11(5) of the SEBI Act, within 45 (forty– five) days from the date of receipt of this Order. An intimation regarding the payment of said disgorgement amount directed to be paid herein, shall be sent to “The Division Chief, ISD-SEC 5, SEBI, SEBI Bhavan II, Plot no. C – 7, ‘G’ Block, Bandra Kurla Complex, Bandra (E), Mumbai–400 051” .

e. The following Noticees are hereby imposed with a monetary penalty under Section 15HA of the SEBI Act, as indicated in the Table below:

f. Noticees shall pay the monetary penalty imposed on them [amount mentioned in paragraph 278(e)] within a period of forty–five (45) days from the date of receipt of this Order.

g. Noticees shall pay the monetary penalty by online payment through following path on the SEBI website: sebi.gov.in/ENFORCEMENT → Orders → Orders of Chairman / Members → Click on PAY NOW. In case of any difficulties in payment of penalties, the Noticee may contact the support at portalhelp@sebi.gov.in.

h. The Noticees shall forward details of the online payment made in compliance with the directions contained in this Order to “The Division Chief, ISD-SEC 5, SEBI, SEBI Bhavan II, Plot no. C – 7, ‘G’ Block, Bandra Kurla Complex, Bandra (E), Mumbai–400 051” and also to e–mail id: tad@sebi.gov.in in the format given below:

i. For the purpose of complying with this Order, Banks shall permit transfer of the amounts frozen, if any, in the accounts of Noticees against whom direction for disgorgement has been issued.

j. Proceedings against Noticees 13, 48 and 64 are being disposed of without issuance of any directions.

279. This Order comes into force with immediate effect.

280. This Order shall be served on all the Noticees, Recognized Stock Exchanges,

Depositories and Registrar and Share Transfer Agents and Banks to ensure necessary compliance.

Date: May 29, 2025
Place: Mumbai     

ASHWANI BHATIA        
WHOLE TIME MEMBER
SECURITIES AND EXCHANGE BOARD OF INDIA